China is poised to become the world’s top retail market in 2019, surpassing the U.S. by more than $100 billion, according to eMarketer’s latest worldwide retail and ecommerce forecast.
eMarketer expects China’s total retail sales will grow 7.5% to $5.636 trillion in 2019. In contrast, U.S. retail sales will grow 3.3%, reaching $5.529 trillion. Growth rates are slowing for both countries, but China’s growth rate will exceed that of the U.S. through 2022.
“In recent years, consumers in China have experienced rising incomes, catapulting millions into the new middle class,” said Monica Peart, senior forecasting director at eMarketer. “The result has been a marked rise in purchasing power and average spending per person.”
Ecommerce is a major driver of China’s retail economy, with sales growing more than 30% in 2019 to reach $1.989 trillion. That means 35.3% of China’s retail sales occur online—by far the highest rate in the world. By the end of this year, China will have 55.8% of all online retail sales globally.
In the U.S., ecommerce is on track to represent 10.9% of its retail sales.
Alibaba leads ecommerce sales in China with a 53.3% share. But its share has been steadily declining for the past several years, as smaller players—including social commerce platform Pinduoduo—have been chipping away at Alibaba’s dominance.
“Relative newcomers and multichannel retailers continue to take share from giants Alibaba and JD.com,” Peart said. “The mature players set their sights on further international expansion. Smaller local players are finding their niche in the Chinese ecommerce market by integrating WeChat and using online-to-offline data to better target consumers.”